A stronger dollar and higher U.S. bond yields are a double-edged sword for global markets

The Federal Reserve looks like it could pull away from the global central-bank pack again. The dollar and U.S. yields are the key swing variables in what that means for the rest of the world.

Markets had pretty much universally expected the Fed to lift interest rates by 0.25 percentage point, and the Fed duly delivered. But the signal that there could be three interest-rate increases in 2017 rather than two has pushed up bond yields and the dollar sharply. The ICE dollar index has risen 1.8% in two days and reached its...